Watch the origin of money playing out in real-time in Cyprus

Credit-backed money could be passed around the nation after the implementation of capital controls.

The origins of money are frequently fought over. Classical economics textbooks frequently cite the idea of a barter economy switching to money for the efficiency gains. Adam Smith, in 1776, was well aware of the problems with barter economies, writing that:

One man, we shall suppose, has more of a certain commodity than he himself has occasion for, while another has less. The former consequently would be glad to dispose of, and the latter to purchase, a part of this superfluity. But if this latter should chance to have nothing that the former stands in need of, no exchange can be made between them.

The problem is, that didn't happen. David Graeber's book Debt: The First 5000 Years contains a pretty thorough demolition of the idea, noting that no anthropologist ever has found a pre-monetary society which operates a barter economy in that fashion. A few societies which have lost money for other reasons have reverted to barter, but that's a whole different thing.

Instead, Graeber writes, money arose from debt. Its first role is as a unit of account, a way of tabulating that the person who you lent a cow owes you something; then, as the amount of outstanding debt in society grows, those IOUs become tradable, and eventually standardised. You can even see that on British bank notes – they are, strictly speaking, promissory notes, representing not a sum of money, but a sum of debt. "I promise to pay the bearer, on demand…" reads the text on the front.

And now, as David Keohane excerpts over at FT Alphaville, we could be seeing that route to money creation re-occurring in Cyprus. Citi's William Buiter writes that the capital controls imposed on the country:

Will, if they persist for more than a few weeks, likely lead to a search for alternative media of exchange for internal transactions. IOUs of large, respected enterprises could for example be countersigned and start to circulate more widely as media of exchange and means of payment. This was the case, for instance, during the 1970 bank strike in Ireland, uncleared cheques were made negotiable (like bills of exchange) and pubs and shops served as credit verifiers. These could later develop into more full-fledged parallel currencies, if internal euro liquidity in Cyprus remains very scarce.

It's also another example of how private money creation – à la Bitcoin and so many other initiatives – isn't that new or trendy at all. But the problem for groups of citizens making their own private money is that eventually they have to contend with a government.

That's not, as some of the more alarmist bitcoiners and goldbugs would have it, because the Government comes in and seizes your money if you start to rival its power. (That said, most countries do have laws on the books preventing you from minting your own coinage.) It's the more prosaic matter of taxes.

Governments have the power to demand payment of taxes in whatever currency they want – and usually, the currency they control. So while private money might grow relatively sizeable in Cyprus, no matter how organised it gets, people will always need to hold onto euros – and Bitcoin is going to struggle to get a foothold as a "real" currency if you need to convert back to pounds every April to pay HMRC.

Still, one of the few fun things about living in these interesting times is that those of us who know basic economics get to watch our textbooks played out in front of us. Northern Rock was a bank run with real queues outside the front of the building; Bitcoin lets us have a more up-to-date example of a speculator's bubble than tulip madness; and now we're seeing the origin of money in real-time.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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All the Premiership teams are competing to see who’s got the biggest stadium

It’s not just a financial, but a macho thing – the big clubs want to show off that they have a whopper.

Here in NW5, where we live noisily and fashionably, we are roughly equidistant from Arsenal and Spurs. We bought the house in 1963 for £5,000, which I mention constantly, to make everyone in the street pig sick. Back in 1963, we lived quietly and unfashionably; in fact, we could easily have been living in Loughton, Essex. Now it’s all changed. As have White Hart Lane and Highbury.

Both grounds are a few metres further away from us than they once were, or they will be when White Hart Lane is finished. The new stadium is a few metres to the north, while the Emirates is a few metres to the east.

Why am I saying metres? Like all football fans, I say a near-miss on goal was inches wide, a slow striker is a yard off his pace, and a ball player can turn on a sixpence. That’s more like it.

White Hart Lane, when finished, will hold 61,000 – a thousand more than the Emirates, har har. Meanwhile, Man City is still expanding, and will also hold about 60,000 by the time Pep Guardiola is into his stride. Chelsea will be next, when they get themselves sorted. So will Liverpool.

Man United’s Old Trafford can now hold over 75,000. Fair makes you proud to be alive at this time and enjoying the wonders of the Prem.

Then, of course, we have the New Wembley, architecturally wonderful, striking and stunning, a beacon of beauty for miles around. As they all are, these brave new stadiums. (No one says “stadia” in real life.)

The old stadiums, built between the wars, many of them by the Scottish architect Archibald Leitch (1865-1939), were also seen as wonders of the time, and all of them held far more than their modern counterparts. The record crowd at White Hart Lane was in 1938, when 75,038 came to see Spurs play Sunderland. Arsenal’s record at Highbury was also against Sunderland – in 1935, with 73,295. Wembley, which today can hold 90,000, had an official figure of 126,000 for the first Cup Final in 1923, but the true figure was at least 150,000, because so many broke in.

Back in 1901, when the Cup Final was held at Crystal Palace between Spurs and Sheffield United, there was a crowd of 110,820. Looking at old photos of the Crystal Palace finals, a lot of the ground seems to have been a grassy mound. Hard to believe fans could see.

Between the wars, thanks to Leitch, big clubs did have proper covered stands. Most fans stood on huge open concrete terraces, which remained till the 1990s. There were metal barriers, which were supposed to hold back sudden surges, but rarely did, so if you were caught in a surge, you were swept away or you fell over. Kids were hoisted over the adults’ heads and plonked at the front.

Getting refreshments was almost impossible, unless you caught the eye of a peanut seller who’d lob you a paper bag of Percy Dalton’s. Getting out for a pee was just as hard. You often came home with the back of your trousers soaked.

I used to be an expert on crowds as a lad. Rubbish on identifying a Spitfire from a Hurricane, but shit hot on match gates at Hampden Park and Ibrox. Answer: well over 100,000. Today’s new stadiums will never hold as many, but will cost trillions more. The money is coming from the £8bn that the Prem is getting from TV for three years.

You’d imagine that, with all this money flooding in, the clubs would be kinder to their fans, but no, they’re lashing out, and not just on new stadiums, but players and wages, directors and agents. Hence, so they say, they are having to put up ticket prices, causing protest campaigns at Arsenal and Liverpool. Arsène at Arsenal has admitted that he couldn’t afford to buy while the Emirates was being built. Pochettino is saying much the same at Spurs.

It’s not just a financial, but a macho thing – the big clubs want to show off that they have a whopper. In the end, only rich fans will be able to attend these supergrounds. Chelsea plans to have a private swimming pool under each new box, plus a wine cellar. Just like our street, really . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle